Two More Loudoun Nonprofits Could Get Tax Exemptions

Four nonprofit organizations applied for exemptions to county taxes, and two will go on to face scrutiny at the Board of Supervisors.

If they win approval, Hero Homes Inc. and Makersmiths Inc. will be exempted from county real estate and property taxes in 2018. In 2017, they collectively paid $5,574.03 in taxes. Neither has received any funding from the county government through its usual grant funding process.

Purcellville-based HeroHomes builds homes for disabled veterans of the U.S. Armed Forces in Loudoun County. Since its founding in 2015, it has built one home in Purcellville, and is working on two more, in Round Hill and Hillsboro.

Makersmiths provides community workshops on technical projects, such as welding, building a drone, woodworking, car repair, 3-D printing, laser cutting, and a variety of other works. It has quickly become a fixture in the maker movement in Loudoun.

Two other nonprofits applied for tax exemptions but did not make the cut. Stones of Herndon Inc. was deemed ineligible by county staff members. According to nonprofit tracker GuideStar, its federal tax-exempt status was automatically revoked by the IRS for failing to file certain paperwork for three consecutive years.

Another, known variously as the Automotive Coalition for Traffic Safety and the American Coalition for Traffic Safety, was considered eligible, but the board’s finance committee narrowly voted against referring it to the full Board of Supervisors. County Chairwoman Phyllis J. Randall (D-At Large), finance committee chairman Matthew F. Letourneau (R-Dulles), and Supervisor Tony R. Buffington Jr. (R-Blue Ridge) voted against the request because it does not provide Loudoun-specific services. The nonprofit is headquartered in Sterling.

The Board of Supervisors exempts nonprofits from county property and real estate taxes on a case-by-case basis. In 2017, the county gave up $5.1 million in foregone taxes from 37 nonprofits. Those are in addition to organizations that are tax-exempt by Virginia law, such as governments and property owned by religious organizations.

Finance committee chairman Letourneau said he votes against all nonprofit tax exemption because he believes it’s the wrong way to help the organizations.

“Instead of granting a nonprofit exemption, if we want to give people money, we should just give them money, and we have a process for that,” Letourneau said. “And I feel like we do a better job in that process of getting to the nitty gritty of the organizations.”

“I don’t believe giving them grants so that the nonprofit can then take the money and give it back to the county to pay taxes makes a lot of sense,” said Vice Chairman Ralph M. Buona (R-Ashburn). “And you know we’ve had a lot of difficulty with our grant process the last several years. We’ve revised it every year to try to make it better, and every year we revise, it makes new problems.”

Loudoun has for several consecutive years attempted to revise its grant-making process. This year it granted $1,076,469 to 32 nonprofits, which nonprofit leaders have said just isn’t enough to meet the community’s needs.